A Colorado solar-and-battery project facing ongoing supply chain disruptions can postpone its operational start date by 21 months, FERC decided in a 3-1 vote Tuesday.

The ruling means that the 100-MW Front Range-Midway Solar project, which will interconnect into the Public Service Company of Colorado (PSCo) balancing area, might commence commercial operation nearly 10 years later than originally proposed (ER23-1108).

Xcel Energy subsidiary PSCo contested Front Range’s February request to waive relevant sections of the utility’s large generator interconnection procedures — and an amended large generator interconnection agreement (LGIA) — to allow the project to move its start date from March 31, 2024, to Dec. 31, 2025.

The Front Range project, which will pair a 100-MW solar photovoltaic facility with a 50-MW battery system, is being developed by Italy-based Enel and TradeWind Energy. The project was initially slated to begin commercial operation in July 2016 before Front Range and PSCo entered an amended LGIA that set a new deadline of Oct. 31, 2022.

In May 2022, FERC granted Front Range an 18-month extension to that deadline — to March 31, 2024 — “due to interruptions and delays in the project development process caused by the COVID-19 pandemic, port shutdowns within China and the prospect of new tariffs on modules.”

In its most recent request for an extension, Front Range argued that additional supply chain disruptions have arisen since last May’s order. They include power outages in China that have caused component capacity constraints, continued shipping delays for equipment and the U.S. government’s June 2022 implementation of the Uyghur Forced Labor Prevention Act (UFLPA), which presumes that all goods coming from China’s Xinjiang Uyghur Autonomous Region — the origin of many solar components — are the product of forced labor.

Front Range said it received a Notice of Detention from the U.S. Customs and Border Protection (CBP) in December for initial deliveries of PV modules that its supplier had manufactured in China and delivered to a U.S. port. The company said that it does not expect the equipment will be released soon because CBP has not provided clear guidance on the standard necessary to overcome the presumption for detention under the UFLPA.

“As a result, Front Range states that it will need additional time to procure an alternative supply of PV modules for the project,” FERC noted in Tuesday’s order.

In its filing with FERC, Front Range contended that the project continues to be viable, noting that the developers have secured all necessary property rights to begin construction; negotiated easement agreements with PSCo and the Western Area Power Administration to construct the interconnection tie-line; completed necessary environmental assessments; obtained a critical permit from El Paso County; and posted the required financial security under the interconnection agreements.

Front Range said that since the May 2022 order, it has “procured the battery energy storage system and transformer, executed the purchase order for the necessary PV modules, and funded and completed the network upgrades delineated in the LGIA and surplus LGIA.”

Waiver Requirements

Front Range also said its waiver request satisfies the commission’s criteria for granting a waiver, contending that:

• the request was made in “good faith,” as demonstrated by the progress the company has made in developing the project, which would have been completed last December “but for” the CBP detention of its equipment.
• the waiver is limited in scope, given that 21 months is a finite amount of time. Front Range also argued that the waiver would not relieve it of any financial obligations because it has already paid for the transmission upgrades needed to interconnect the project.
• the request seeks to address the “concrete problem” of overcoming the supply chain disruption created by the UFLPA and finding a new supplier.

Front Range also contended that the waiver would not cause harm to any third parties, given that it has already fully funded the need transmission upgrades.

In contesting the waiver request, PSCo argued that Front Range had previously exhausted its suspension right under the LGIA and noted that an additional waiver would push the project’s commercial operation date to nearly a decade beyond the originally designated date.

The utility also contended that Front Range had not provided specific details about the impact of the UFLPA and the CBP’s Notice of Detention, a point that Front Range later contested by saying that it had worked diligently to assemble the “traceability documentation” regarding the origins of its PV modules in order to expedite their release but was still awaiting review by CBP.

PSCo’s protest also questioned the economic viability of the Front Range project, pointing out that the off-taker — the utility itself — had terminated its power purchase agreement for the project in January after Front Range failed to meet development milestones. The utility pointed to October and December 2022 letters from Front Range in which the company sought to renegotiate the PPA, say that current market conditions for solar development had rendered the original agreement “uneconomical and unfinanceable,” raising questions about Front Range’s assertion that completion hinged on the detention of the modules.

Front Range countered that the same letter stated that the project “has not failed” but was pointing to the fact that import restrictions had affected solar projects nationwide. The company said that PSCo had renegotiated PPAs for other solar projects and agreed to postpone their completion dates.

Commission Finding; Danly Dissent

In approving the extension, FERC determined that Front Range had satisfied its waiver criteria. The commission also found that, contrary to PSCo’s assertion, the record demonstrated that Front Range has made “continued efforts” to contact the CBP to resolve the UFLPA matter.

The commission also dismissed PSCo’s assertion that Front Range was seeking a waiver “merely to stay in an interconnection queue with the hope of securing an off-taker.”

“Instead, Front Range provides evidence of global supply chain disruptions and ongoing permitting and regulatory approval processes since the May 2022 order affecting the project,” the commission wrote.

FERC also said it was “not persuaded” by PSCo’s contention that Front Range’s 2022 letters to the utility suggested that the project was unlikely to be completed even before the UFLPA detention.

“While Front Range asserted that the project had become ‘uneconomical’ under the terms of the then-existing power purchase agreement while attempting to renegotiate those terms, we do not agree that this rendered the project unable to meet the March 31, 2024, commercial operation deadline, assuming that an agreement between the parties could have been reached,” the commission said.

In a dissent against the ruling, Commissioner James Danly said Front Range’s waiver “can hardly be” said to apply to a single deadline, given the project’s previous delays.

“While implementation of the Uyghur Forced Labor Prevention Act in June 2022 may present new circumstances not at issue when the commission granted Front Range a prior waiver request, application of the UFLPA is an industry-wide issue and does not support a finding that granting a waiver here is limited in scope,” Danly wrote.

He also argued that while Front Range had described its efforts to resolve the equipment detention issue, it did not explain any of its efforts to identify an alternative supplier for the PV modules.

“Front Range has also not addressed whether it has secured a new off-taker after termination of the power purchase agreement with PSCo due to Front Range’s failure to meet project development milestones,” he wrote. “Nor does Front Range state that it will construct the facility without an off-taker. For these reasons, Front Range fails to demonstrate that the waiver actually addresses a concrete problem.”